Gold is trading 0.8 percent higher at $1988 which is the highest since August 19. The rally is mainly attributed to the multi-year decline in the US dollar and the speculations on the lower interest rates in for a long period. A Fibonacci retracement drawn from a recent low at $1668 to the historical high at $2074 also suggests that the retracement period is over and Gold once again may climb above $2000.

The intraday support level is at $1970 while stronger supports are present at $1955 and $1938 levels. The near term resistance is at $1984 while the $2000 is likely to act as a stiff resistance area. The RSI has moved above the neutral zone (refer to the daily charts) and appears to be entering in a further bullish zone. The pattern on the 4-hourly chart is equally bullish and favors long entries. An ideal position would be on a slight dip towards $1970 with a target of $1990/1995.

A decent stop-loss for this trade would be at or below $1955.
The $2000 resistance level may hold for some time and smaller corrections may take place from this level.

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By LCMS Traders FX Analysis Team

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